e kindle? in today's cover story, voting machines and ties to politically focused companies. plus, the digital takeover. as more newspapers fold, how the business model continues to change. is now the time to include more stocks from europe and china in your portfolio? and, there are rocks in every garden according to one trader. we'll find out what stock he's talking about. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas.

good morning. it's tuesday, october 23. i'm angela miles. in today's first look: a nice surprise for yahoo investors. shares last night broke out above $16 on earnings. new yahoo ceo marisa mayer reported the company posted a larger-than-expected profit and hinted at a stock buyback. texas instrustments had a jump in earnings even though sales slipped. tech helped turn around the trading day yesterday. at one point the dow as down 108 points. that changed late in the session, with stocks including hewlett-packard rallying to the close. the oil slide was the other big deal on the day. and representative barney frank, who co-wrote the dodd-frank act, says prosecutors should not go after jpm morgan chase over bear stearns' role in the financial crisis. scott bauer of trading advantage joins us on this tuesday morning. good morning to you, and stocks turned into the comeback kid yesterday. > > it was quite a reversal. we

saw the market come out of the chute yesterday morning, and then, during the day, as apple's sold off a little bit - i don't want to say that apple was negative, but we saw apple selling off midday - the market kind of followed its trend, and then all of a sudden buyers stepped back in, and boy, that last hour of trading we saw such a huge reversal in the marketplace, in the volatility, and i really think that's going to carry on to the trading day today. > > what are you seeing as far as money rotation between stocks and bonds? > > you know, with the big pullback that we saw last week, almost 3% in the last three trading days, that gave investors on the sideline or with assets elsewhere an opportunity to come back into this marketplace a little bit. i really believe that any time we see any sort of pullback, 1, 2, 3%, that's going to give these investors that have been on the sidelines, it's going to give money managers, fund managers, the opportunity to get their toes back in. > > what are traders saying about the oil dip yesterday? oil futures trading below $89.

> > this is an interesting one. right now you look at the chart, and it's hard on the december futures, which is the current contract. but there is no support, anywhere, anywhere below here. we have $90, just $1 - $1.50 higher, as a resistance level, and if we can't break through that to the upside, look out below. i'm hearing from traders maybe as much as a 10% further drop in the coming weeks prior to the election. > > i think i shall wait to buy gas for a week. thank you scott bauer of trading advantage. there's concern about people with ties to voting machine equipment who make political contributions in elections that will use those same machines to tabulate the results. in our cover story, is it a conflict of interest or exercising a right? hamilton county, ohio, which comprises cincinnati and surrounding suburbs, is this battleground state's third most populous county. last year, private equity firm h.i.g. reportedly bought a large portion of the company that supplies electronic voting machines to hamilton county,

hart intercivic. in an op-ed piece for business magazine forbes, contributor rick ungar described h.i.g.'s founder, tony tamer, as a big-time money raiser for mitt romney, and expressed concern that two h.i.g. directors attended the fundraiser in which romney made the "47% of americans" statement that went viral. "the importance of the appearance of integrity supercedes their right to make political contributions. if they want to contribute, they shouldn't be in the voting machine business." in addition, out of hart intercivic's five board members, ungar says two of them made direct contributions to the romney campaign, and one a smaller amount to the obama campaign. "there are many places where the electorate is being re- shaped and the major media hasn't picked up on this. i think it could have a dramatic effect in this election."

the hamilton county board of elections deputy director knows of no violation or a confict of interest, and downplayed tampering suspicions, saying, "we purchased the hart intercivic equipment in 2005. we own the machines and the software. our own staff do both programming and vote tabulation. the only contact we have with hart intercivic is a maintenance agreement." there are also allegations that the investment firm run by one of mitt romney's sons has what rick ungar calls "shared business interests with h.i.g." for the record, despite our efforts for a response from both h.i.g. and hart intercivic, we were told the individuals we sought were "unavailable." the presidential candidates clashed over foreign policies in their 3rd and final debate of the election season last night. we're going to have to do more than going after leaders and killing bad guys. we're also going to have a far more comprehensive and effective

strategy to help move the world away from terror and islamist extremisim and we haven't done that yet. you look at the record for the last 4 years and ask is iran closer to a bomb? yes. iran is at its weakest point economically, strategically militarily in many years and we are going to continue to keep the pressure on to make sure they do not get a nuclear weapon. that's in america's national interest and that will be the case so long as i'm president. president obama joins bruce springsteen today when the rocker performs a free concert in charlottesville, virginia. governor romney and runningmate paul ryan will hold a rally tonight in morrison, colorado. disturbing news is coming from the fda regarding "monster" energy drinks. bloomberg.com reports monster beverages have been cited in 5 death reports by u.s. regulators during the past year. a spokeswoman for monster beverage says "the company has not been notified by the fda about its enegry drinks

as a possible factor in the deaths." monster, however, admits to marketwatch.com it is being sued by the parents of a 14-year-old who claim the energy drinks led to caffeine toxicity and eventually the death of their daughter. monster stock fell 14% yesterday. apple is delivering its latest little addition to its tech family today - the new ipad mini, which is smaller and cheaper than its big brother ipad. there's buzz this new gadget might just overtake amazon's kindle in the marketplace when it hits stores next month. but tech analyst rob enderle says "not so fast." "this is really apple trying to wrap its arms around what has become an incredibly hot sector. i see people seeing it as an alternative to the kindle fire, but because the fire is so closely related to reading and amazon is so closely tied to that practice and apple not so much, i'm not convinced yet that it'll be a huge challenger

for the kindle fire." meanwhile, microsoft releases both its new tablet, the "surface," and its new windows 8 operating system on friday. reviews thus far of the new software are decidedly mixed. it's being labeled a "radical makeover" because it uses just one system across computers, tablets and notebooks. there are concerns consumers might resist such radical change to such a familiar system. clues about the economy this holiday season are coming from fedex. the company expects a 13% rise in holiday shipping, driven mostly by online shoppers. some analysts predict cautious consumers will use lower priced services from fedex. nonetheless, this holiday the company expects to hire an additional 20,000 seasonal workers to deliver 280 million packages. december 10th is anticipated to be the busiest day ever for fedex. a power shift is happening at siemens. the germany-based company is giving up its solar business to focus on wind energy and hydro-electric power. siemens was facing strong

price competition in the solar market from china. the chinese government is accused of giving subsidies to chinese solar panel companies allowing them to sell panels for less than the cost to make them. in the u.s., the obama administration is upholding steep tariffs on solar panels from china after finding the country was selling low-cost solar panels in the u.s., which was hurting american solar companies. a wage war is happening at walmart. 21 employees claim the retail giant, along with two staffing agencies, broke federal minimum wage and overtime laws. the workers filed a lawsuit monday in chicago alleging walmart and the temp agencies failed to keep an accurate track of the hours they worked. the suit also says walmart uses staffing agencies to hire hundreds of temp workers. walmart responed, saying, "we are committed to ensuring that anyone working in our stores is treated appropriately and compensated farily for every hour they work."

news corp appears to be passing on buying two major newspapers. recent reports said news corp was in talks to buy the la times and chicago tribune. however, this week a spokesperson for the company called the reports "wholly inaccurate." trbune company, which owns both the la times and chicago tribune, is currently under bankruptcy supervision. the la times says it will not retract its story. ancestry.com is uprooting its business. the website, which tracks family genealogy, is being bought up by a private equity firm. european private equity firm permira is spending about $1.6 billion on the deal, which will be finalized next year. the company reports earnings tomorrow. in corporate earnings, caterpillar topped estimates, but the big rig company lowered its outlook for the year on concerns about a slowing global economy. coal miner peabody engery reported an 84% drop in earnings, wieghed down by lower prices on coal. still, the company beat wall street estimates. toymaker hasbro also came in better-than-expected, but says its numbers were hurt by weakness in toys for boys and the stronger dollar.

nissan's number one selling sedan is being recalled. u.s. safety regulators say bolts in the power steering of nissan altimas were not tightened properly at the nissan plant in canton, mississippi, and could shake loose causing a possible crash. nearly 14,000 altimas, model years 2012 and 2013, are being recalled. nissan admits an unspecified number of accidents have been linked to the loose steering bolts. the maker of famous london taxis may be running out of money. manganese bronze holdings, which manfactures the cabs, admits efforts to secure funding to keep the company rolling have proved unsuccessful. just last week some of its cabs were recalled over a steering problem. the london cab company is now trying to repair its reputation, presumably before it's up for sale. still to come, print media

continues to struggle with finding a direction for the future of journalism. we'll get insights later on. but first, is it time to pack up your investment portfolio for a trip overseas? that's next.

o' as a follow-up to last night's presidential debate on foriegn policy, we are taking a look this morning at whether now is a good time to invest your

money overseas. joining us via skype, ed gjertsen of mack investment securites and alan knuckman of one stop option. good morning to both of you. > > morning angie. > > ed, are you bullish or bearish on investing in europe or china? > > we're more neutral. there's a lot going on that's undetermined, and there's a lot of pessimism that is out there. so, the more pessimism that there is, i think the more bullish we're going to be. but right now we're just sort of sitting on the sidelines. > > alan, are you ready to jump in overseas? > > i like the euro actually when it was very much out of favor down at the $1.20 level. it's now recovered, but in the near-term, the euro currency which tells the story looks like it's going to have a quick pop to $1.36, and have a complete v- shaped recovery and really shake things up. > > ed, it sounds like you're on the fence. what would be a signal or a clue that now is the time to start putting some of your clients' money overseas? > > it's very uncomfortable sitting on this fence for so long. but if you look at a lot of the developed countries that are out there, you look at like 13 of the most developed countries, 50% of the consumers

have a negative trend toward consumer confidence. so, the world is slowing down. so until we see this big push for everybody is very negative, i really don't see an opportunity to start buying. > > there are a handful of money managers out there though that are starting to feel comfortable putting money to work in europe. alan, are they ahead of the curve or right on time? > > i think they're right on time. obviously as a trader you want to buy things when it looks the worst, and we've already seen that major turn. and you can use the performance that we've seen in the stock market here in america. four years we've gone essentially straight up where the s&p has doubled in value. against all potential performance issues, it's continued to go higher. so, the news is noise. trade what the markets and the trends are telling you. > > ed, where would you put money? china has growth, better economic growth than the u.s. right now. > > we're looking at opportunities. again, when there's blood in the streets, you want to start looking at those specific individual countries. to make sort of a macro bet would be very difficult given each country's dynamic and the challenges that they have. so we'd be drilling

down, more toward looking at individual countries in terms of their overall balance sheets and things like that. > > give me a country, give me a name, what are you doing? > > you're killing me. we're looking at the netherlands and that type of an area as well. we're trying to stay away from some more of the troubled names. but those who have a little bit of guts and are not worried about necessarily too much risk are finding great opportunities, as alan said. > > and quickly alan, what about you? > > still the good old u.s. of a. corporate profits continue to be fine even though the growth has slowed. this is where money is being made and this is where people are coming for yield. > > alan knuckman of one stop option and ed gjertsen of mack investment securites. thanks for being on the show today. > > thanks angie. still ahead, more newspapers are dropping circulation. what it means for the future of the media. that's next with bill moller.

what is becoming and will become of journalism? there are fewer readers, viewers and listeners for newspapers, television and radio. yeah, there are some blogs that are growing, along with a few national sites like huffington post and the daily beast. but locally based, in-depth journalism - how do you make that pay? stephen shepard, he's the founding dean of the graduate school of journalism at the city university of new york. for 21 years he was editor-in-chief of business week. he began in the age of pure print and retired in 2005, during the digital encroachment. he's got a terrific memoir just

out, "deadlines and disruption: my turbulent path from print to digital." stephen, i assume there is still an appetite for good journalism, but it's just that the current business model doesn't seem to fit it. > > that's exactly right. i'll give you just one statistic: in the last five or six years, newspapers have lost half of their advertising revenue. that's a whopping $25 billion, which is what accounts for the layoffs and the thinning out of newspapers and the closing of bureaus and so forth. and they're not charging online for content. so the business model has kind of collapsed, and we need a new business model. > > is the wrong question then to ask, "how do we sustain newspapers or some form of that kind of journalism?" rather than, "what is the new platform going to be for all this content?" > > yes. i would say that we're not in the printing business, we're not in the paper business, we're in the journalism business. so as long as we continue doing good journalism, investigative journalism, narrative journalism, all the things that

people expect, on these new platforms, i think we're going to be all right. we have to figure out a business model that will sustain journalism on smartphones and tablet computers and on the web. > > do you think though that the old form of journalism, where we have a team of writers, reporters, editors, has to be somehow sustained to transfer to whatever the new business model will be? or does that old, so-called "dinosaur" form of journalism have to die off first? > > i think what's going to die is just the form of delivery, which is to say print newspapers delivered to your door. i think the way we do journalism is actually going to be enhanced by the new technologies, because you can present the information interactively to an audience of one, personalized, customized. you can to multimedia, you can do crowdsourcing, you can do blogging, you can do podcasting, you can still do team reporting, you can still do investigations, you can still break stories online. so i don't see that the form of journalism is going to be diminished. i think actually it's going to be enhanced. but we do have to find a way to pay for it. > > do you still get the newspaper delivered to your house? > > i get three newspapers delivered every morning, bill. > > i'm kinda old school too,

but we both like the digital formats as well, correct? > > i still read, on my ipad i read newspapers and magazines. for magazines in fact i think ipads are really a wonderful platform, because they're sort of leisure-time devices. you can curl up in bed with your laptop, and magazines tend to be more leisure reads than newspapers do - they're weeklies and monthlies. so i think actually magazines are going to be quite enhanced by the digital revolution. > > we're still in the middle of this transition period. stephen shepard, thank you so much. > > thank you very much bill. will ups deliver for investors? find out next.

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last but never least on our show, matt shapiro, bringing up the tail of the show to talk about ups. earnings are coming out today. what's your update on this stock? this is a stock that you actually favor. > > yes, and bringinup the tail is right. ups has been a dog for quite a while. and people who watch this show know me - ups is one of my biggest holdings. so, people say, "matt, why do you like ups?" and all i have to say, you know, there's rocks in every garden. ups had a bad earnings report last quarter. expectations are low - at $1.06 a share. but they've missed by 2¢ each of the last two quarters, so we'll have to see, angie, if a little bit of the summer concerns led to a little bit of a shipping slowdown in this quarter, and what their outlook is. remember, yesterday fedex was much more upbeat about its outlook going into the end of the year.

> > all right. every once in a while you have to see some rain to see that rainbow. sometimes it's good to buy a stock when it's out of favor. so would you buy more shares at this current level, or are you just going to kind of ride it out here? > > absolutely. at $71, ups, the expectations are very, very low. this is, in the end, a stock that's going to grow along with the economy, and it's the most profitable major package shipping company in the world. and think about that dividend angie: 3.2%, and i'm sure they're going to raise it again this year. > > aren't there concerns though about europe and china with this company as well? > > well, taking a look at the big picture, remember, the world puts out about $77 trillion in gross domestic product. we're about $20 trillion, europe's abou that closes out our show for today. be sure and check in tomorrow. the ceo of hotwire.com will be here sharing his inside tips on getting the best travel deals this holiday season. from all of us at first business, as always, thank you for watching!

the giants are world series bound after decisive seven game series to take the national pennant. fans celebrate the giants pennant win, we have reaction. now two weeks away from election day. the candidates' schedule today. it's ahead on the ktvu channel 2 news.

complete bay area coverage starts right now, this is ktvu channel 2 news. >> did you for waking up with us on this tuesday morning, october 23rd. i'm pam cook. a little rain overnight. let's check in with steve paulson with the forecast. >> last night it came down, late in the game and also overnight some areas took a pounding. that system is moving south over towards san jose and points east. mostly cloudy cool day with off and on showers. right now traffic is moving along pretty well around the bay area but it is a little bit wet out there from the overnight rain, so you still have to deal with somewhat wet commute, highway 24 between walnut creek and oakland looks good. the morning commute looking good if you are driving on 880 north and southbound. topping our news, the san francisco giants are national league champions and the world series is coming back to the bay area tomorrow. >> th